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ALERT - Supreme Court Upholds “Cat’s Paw” Liability under USERRA

In a decision issued March 1, 2011, the U.S. Supreme Court shed light on employers’ potential “cat’s paw” liability. Justice Scalia, writing for the Court, held that “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable” under the United Services Employment and Reemployment Rights Act of 1994 (USERRA). Staub v. Proctor Hospital, No. 09-400, 562 U.S. (2011).

The plaintiff in the case, Vincent Staub, worked as an angiography technician for defendant Proctor Hospital until 2004, when he was terminated. While employed by Proctor, Staub was a member of the U.S. Army Reserve, which required him to attend drill one weekend per month and to train full time for two to three weeks a year. Both Janice Mulally, Staub’s immediate supervisor, and Michael Korenchuk, Mulally’s supervisor, were hostile to Staub’s military obligations. In January 2004, Mulally issued Staub a “Corrective Action” disciplinary warning without justification. Then in April 2004, Korenchuk informed Proctor’s Vice President of Human Resources, Linda Buck, that Staub had violated the Corrective Action, which again was false. Buck relied on Korenchuk’s accusation, and after reviewing Staub’s personnel file, she decided to fire him.

Staub sued Proctor under USERRA, claiming that his discharge was motivated by hostility to his obligations as a military reservist. He did not contend that Buck had any such hostility, but instead that Mulally and Korenchuk did, and that their actions influenced Buck’s ultimate employment decision.

The relevant statutory provision states: “An employer shall be considered to have engaged in [prohibited discrimination against a member of one of the uniformed services] if the person’s membership . . . is a motivating factor in the employer’s action.” This “motivating factor” language is very similar to that set forth in Title VII.

Proctor argued that an employer is not liable under this standard unless the ultimate decision maker is motivated by discriminatory animus. The Court rejected this argument and reasoned that so long as the earlier agent or supervisor intended, for discriminatory reasons, that the adverse action occur, the wrongful intent required for USERRA liability exists. Furthermore, the Court relied on tort law to reason that the ultimate decision maker’s use of judgment in making the final employment decision does not prevent the earlier supervisor’s action from being the proximate cause of the harm.

Justice Alito wrote a separate concurrence, arguing that the employer should only be held liable when it delegates part of the decision making power to the biased supervisor. According to Justice Alito, an employer should be immunized from liability if it investigates the alleged misconduct. Justice Alito does not, however, require this investigation to be in-depth; in fact, Justice Alito argued that an employer could be immunized from liability even if it relies on facts provided by a biased supervisor. The Court rejected such a defense, arguing that “if the independent investigation relies on facts provided by the biased supervisor . . . then the employer will have effectively delegated the fact finding portion of the investigation to the biased supervisor.”

In response to the "cat’s paw" liability standard articulated in Staub, employers should involve human resources departments and legal counsel as appropriate, to independently review proposed adverse employment actions. In particular, warnings or other recommendations made by supervisors with known or suspected biases should be carefully vetted to ensure credibility and a lack of discriminatory intent. Any termination decisions should be well documented by supporting facts.

For more information, contact your Briggs and Morgan attorney or a member of the Employment, Benefits and Labor Section, ranked as a Minnesota Band 1 practice in Chambers USA.